In the majority of loan agreements with Banks, in addition to the primary borrower, third parties, the guarantors, are also contracted, who guarantee the smooth servicing of the loan or credit by the primary borrower with their personal property.
However, the guarantor retains tanduktoto several benefits under the Law, which it is good to be aware of in order to make use of them. Perhaps the most important of these benefits is the objection of non-payment, which is provided for in article 855 of the Civil Code and consists of the guarantor’s right to refuse payment of the debt until the lender attempts enforcement against the primary debtor and this proves fruitless.
This objection, which is based on the incidental nature of the guarantor’s liability, prevents the joint and several liability of him and the primary debtor towards the lender, so that the guarantor should not be called upon or, if called upon, may refuse to repay the debt, before the attempt to collect the debt, through forced execution, from the primary debtor is exhausted, becoming fruitless.
What should be particularly noted is that in practice, the vast majority of loan contracts pre-formulated by banks provide, in a special, also pre-formulated, General Terms of Transactions, for the guarantor to waive all rights granted to him by the Law (some of which we will deal with in a subsequent article), including the particularly important right of subrogation, thus making him a person who is treated as a self-obligor, even though he merely provided his guarantee and did not receive the amount of the loan, but the primary debtor.
However, based on case law, the waiver of the guarantor’s rights and benefits granted to him by the Law by including a relevant General Term in the loan agreement is checked for its abusiveness based on the Consumer Protection Law (Law 2251/1994 as amended in force) as well as the general legal clauses on abusiveness in light of the Principle of Transparency imposed by European Law that should govern banking transactions.
Specifically, on the above issue, the Supreme Court recently ruled with its Decision No. 13/2015, inter alia, that the guarantor in favor of a borrower who is protected by the Consumer Protection Law, and in particular the one who guaranteed as a defaulter (waiving objections), who does not act within the framework of his professional or business activity, falls within the scope of protection of the above law, due to the ancillary nature of the guarantee.
Moreover , regardless of the guarantor’s status as a consumer or not, his waiver of the relevant right should always be viewed with the litmus test of the existence or non-existence of an abusive exercise of a right within the meaning of the provision of Article 281 of the Civil Code, of which, moreover, the provisions of the Consumer Protection Law constitute a doctrinal specialization.
Thus, if it is determined that the relevant waiver of the guarantor of his above rights took place abusively and deviating without sufficient and reasonable cause from essential and basic assessments of the subordinate law in violation of the above indicatively mentioned provisions and principles, especially from the perspective of the guarantor’s capacity as a consumer and therefore protected by Consumer Protection Law, then the waiver is invalid and the guarantor may exercise his relevant rights, including the objection of dispute, normally, as if the waiver had not taken place.
